Liverpool heads for clash with London

Tony Byrne, perhaps consciously, fits the role of a left-wing Labour Party militant. Wearing a red sweatshirt and baggy jeans, the bearded city councilor, in an interview here, talked of the clash between Liverpool's Labour-dominated City Council and the Conservative government in London. It is, he said, the ''almost inevitable result'' of one being socialist, the other capitalist.

That conflict over the size of the city's budget is now moving toward a showdown July 11 at a City Council meeting. That could mean bankruptcy for this financially troubled city, fines and jail for city councilors should they vote to set property rates (taxes) illegally, or a compromise.

Under Britain's unitary system of government, the central government deals directly with municipal and county governments.

Further, since local governments also tend to be partisan, politics oftimes can worsen the differences that might be anticipated in sharing revenues between the two levels of government.

In Liverpool, the situation has been worsened by an economy that has been in decline for decades. This port, once Europe's greatest, used to stretch for many miles along both sides of the River Mersey. But several factors have contributed to a massive decline in port activity: the arrival of jet aircraft, the shifting of Britain's trade from across the Atlantic to Continental Europe, the end of the British Empire, the decline of coastal shipping with the construction of modern highways, and the shift to containerization instead of general cargo.

Tens of thousands of jobs disappeared. The city's population has declined by more than 200,000 to 450,000.

In the last three years, the government of Prime Minister Margaret Thatcher has pumped some (STR)486 million ($666 million) in various kinds of assistance into Liverpool. According to Roy W. Bunce, a top official in the Merseyside Task Force, London finances more special programs in Liverpool than any other place in England and possibly in the United Kingdom.

This task force was set up in 1981 by Michael Heseltine, then Britain's secretary of state for the environment, after riots in Toxteth, a small slum area of this port city. Its goal was to help rehabilitate the economy of the entire metropolitan area, which includes six local authorities besides Liverpool , and 1.5 million people.

Now, however, the Conservative government wants to restrain local spending and the City Council wants to expand it. Result: deadlock.

For years, the 90-person council was split between Liberal, Conservative, and Labour representatives. This made decisionmaking difficult.

Dealing with economic problems, notes Mr. Bunce, ''has not been helped by inefficiencies in the local public authorities.''

Since gains in local elections May 3, however, the Labour Party has had a majority in the council, with ''militants'' - a term Tony Byrne dislikes - in control.

The Labour Party campaigned on the basis of increasing jobs, building more council-owned houses, no boost in rents on these homes, maintaining city services, and not sharply increasing tax rates. So Mr. Byrne, who holds the powerful post of chairman of the Performance Review and Financial Control Committee, says, ''We have no intention of cutting back'' on city spending.

The term ''efficiency,'' he notes, basically requires firing city workers. The local government, with 30,000 workers, is the biggest employer in town.

With unemployment in the city running perhaps as high as 28 percent, Mr. Byrne adds: ''We can see no sense in putting more people on the dole (unemployment). In theory, we could get rid of 5,000 jobs and balance the books. That would add further to the economic destruction of Liverpool.'' Indeed, he would like to see the city get more money to hire some of the unemployed.

''In parts of Liverpool, 90 percent of young people are unemployed. We have some of the worst housing conditions in Europe and the worst environmental conditions in Europe.''

The government recognizes these problems, but has become alarmed with the rapid growth of municipal spending. It maintains that Liverpool must still live within its available resources, which include property taxes, rents, and central government grants. The government feels that the council has contributed to the problems with its indecisiveness and often socialistic approach.

''There is a very big question of whether Liverpool has used the money it has as wisely as possible,'' said Mr. Bunce.

Some 20 years ago, large areas of slums were cleared. Some of the public housing constructed to provide homes for those slum dwellers has deteriorated.

Mr. Bunce believes many of these properties were poorly managed by the city housing authorities.

The Thatcher government wants to see many of those council homes sold to their tenants. It is offering those with limited income a way to buy and finance part of the house and continue renting the remainder. Eventually, under this scheme, the tenant could end up with full ownership. The City Council prefers to continue renting, though selling some houses in the more affluent suburbs.

Mr. Bunce maintains that garbage collection, housing maintenance, recreation, and education are ''very expensive'' in Liverpool and the quality is ''far from good'' compared with other cities.

Mr. Byrne counters that the city has had insufficient money to replace garbage trucks and other vehicles, and that it is more difficult to keep a poor city clean.

''The whole atmosphere generates depression,'' he says.

The only hope for a settlement seems to lie in negotiations between the council and Patrick Jenkins, the current environment secretary. ''It is not an easy problem to solve,'' notes Mr. Bunce. ''It remains to be seen if a compromise can be made. There might be chaos.''